PS3 may not launch until 2007
08-02-2005, 11:13 PM
#1
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PS3 may not launch until 2007
http://www.gamespot.com/news/2005/08...s_6129862.html
Analyst: Sony could wait till '07 to launch PS3
Sony strategists may see a priced-down PS2 as all the company needs in '06; would ride $99 sticker--and profits--all the way to 2007.
Buried in an analyst's memo, written shortly after last week's Electronic Arts earnings call, was a hidden gem. According to the widely read team at Wedbush Morgan Securities, Sony may delay the release of the PlayStation 3 until 2007--if exactly the right conditions prevail.
Currently, the console is slated to appear in Japan before the end of that company's fiscal year--March 31, 2006--and in North America before the end of 2006.
Given the right set of circumstances, however, that release window (at least in North America) could intentionally lag until after the 2006 holiday buying season.
In a research memo sent to investors, Wedbush senior analyst Michael Pachter set up the following scene for a delayed PS3 launch. It starts with the current-generation Xbox being priced down to $99 post-Xbox 360 launch, but no lower. Concurrent with that situation--an Xbox 360 at an unspecified price and the Xbox at $99--Sony would drop the price of the PlayStation 2 to $99.
There are two components to that pricing strategy: the first is that a $99 PS2 would offer a significant distraction as the 360 launches. As Pachter states: "We believe that the company will attempt to disrupt the Xbox 360 launch with a price cut, and as a result may succeed in diverting attention away from the higher-priced next-generation console."
In addition to the "diversion rationale" is the supporting fact that "the redesigned PS2 carries a manufacturing cost of less than $99," according to Pachter. New consoles are noteworthy for the fact that at the beginning of their manufacturing cycle, the units are sold at a loss. Given that the PS2, according to Pachter, would cost less to make than to sell, it behooves Sony to extend demand for that product for as long as possible. And if Microsoft takes the Xbox price no lower than $99 (still a loss for Microsoft, according to Pachter), Sony will find itself in a win-win situation.
Another cornerstone in Pachter's theory is Sony not wanting to disappoint consumers and retailers by having too few units in the channel over the high-demand weeks of this coming December. Pachter says, "we believe that Sony suffered the ignominy of being unable to satisfy holiday ['04] demand in order to increase its gross profits over the short term."
If the PS3 launches in late '06 and suffers the same fate, Sony would be embarrassed for a second straight year. Without any PS3's in the channel, there's no chance of a shortage of stock. A backward theory perhaps, but a theory based in fact nonetheless.
The key point in Pachter's argument weighs heavily on what sort of showing the 360 has at launch. If the 360 tallies significant sales early, Sony would need to fire on all cylinders and get the PS3 into the channel ASAP. However: "Should Microsoft fail to garner sufficient software support to gain an insurmountable lead, we think that there is a possibility that the PS3 launch will slip into early 2007."
Following the distribution of the memo last week, GameSpot spoke with Pachter who emphasized that he "posited the thought as option value for Sony." Continuing, he said, "I think the 360 will do quite well."
But if the 360 does an about-face at launch and tanks, the above Plan B could be an option the cash-strapped Sony might just consider.
By Curt Feldman -- GameSpot
POSTED: 08/02/05 12:31 PM PST
Sony strategists may see a priced-down PS2 as all the company needs in '06; would ride $99 sticker--and profits--all the way to 2007.
Buried in an analyst's memo, written shortly after last week's Electronic Arts earnings call, was a hidden gem. According to the widely read team at Wedbush Morgan Securities, Sony may delay the release of the PlayStation 3 until 2007--if exactly the right conditions prevail.
Currently, the console is slated to appear in Japan before the end of that company's fiscal year--March 31, 2006--and in North America before the end of 2006.
Given the right set of circumstances, however, that release window (at least in North America) could intentionally lag until after the 2006 holiday buying season.
In a research memo sent to investors, Wedbush senior analyst Michael Pachter set up the following scene for a delayed PS3 launch. It starts with the current-generation Xbox being priced down to $99 post-Xbox 360 launch, but no lower. Concurrent with that situation--an Xbox 360 at an unspecified price and the Xbox at $99--Sony would drop the price of the PlayStation 2 to $99.
There are two components to that pricing strategy: the first is that a $99 PS2 would offer a significant distraction as the 360 launches. As Pachter states: "We believe that the company will attempt to disrupt the Xbox 360 launch with a price cut, and as a result may succeed in diverting attention away from the higher-priced next-generation console."
In addition to the "diversion rationale" is the supporting fact that "the redesigned PS2 carries a manufacturing cost of less than $99," according to Pachter. New consoles are noteworthy for the fact that at the beginning of their manufacturing cycle, the units are sold at a loss. Given that the PS2, according to Pachter, would cost less to make than to sell, it behooves Sony to extend demand for that product for as long as possible. And if Microsoft takes the Xbox price no lower than $99 (still a loss for Microsoft, according to Pachter), Sony will find itself in a win-win situation.
Another cornerstone in Pachter's theory is Sony not wanting to disappoint consumers and retailers by having too few units in the channel over the high-demand weeks of this coming December. Pachter says, "we believe that Sony suffered the ignominy of being unable to satisfy holiday ['04] demand in order to increase its gross profits over the short term."
If the PS3 launches in late '06 and suffers the same fate, Sony would be embarrassed for a second straight year. Without any PS3's in the channel, there's no chance of a shortage of stock. A backward theory perhaps, but a theory based in fact nonetheless.
The key point in Pachter's argument weighs heavily on what sort of showing the 360 has at launch. If the 360 tallies significant sales early, Sony would need to fire on all cylinders and get the PS3 into the channel ASAP. However: "Should Microsoft fail to garner sufficient software support to gain an insurmountable lead, we think that there is a possibility that the PS3 launch will slip into early 2007."
Following the distribution of the memo last week, GameSpot spoke with Pachter who emphasized that he "posited the thought as option value for Sony." Continuing, he said, "I think the 360 will do quite well."
But if the 360 does an about-face at launch and tanks, the above Plan B could be an option the cash-strapped Sony might just consider.
By Curt Feldman -- GameSpot
POSTED: 08/02/05 12:31 PM PST
08-02-2005, 11:17 PM
#2
Suzuka Master
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I doubt it will be true, but I think it would be a REALLY stupid move on Sony's part. A $99 PS2 won't be any real competitor to the X360. The market is already saturated with PS2's and which kids will want a 6-7 year old console when they can get a shiny new many times more powerful system instead?
If the PS3 gets delayed to 2007, I see a big decline in their market share this next gen.
If the PS3 gets delayed to 2007, I see a big decline in their market share this next gen.
08-02-2005, 11:19 PM
#3
The Third Ball
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if sony waits til 2007....that doesnt bode well for giving blu ray a fighting chance in the home movie market. That and xbox360 will dominate.....might even lose ground pending when the nintendo comes out.
08-02-2005, 11:31 PM
#4
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Thread Starter
ok well, I hope someone from Sony sees your posts 
08-03-2005, 02:36 PM
#5
Senior Moderator
it may help boost sales with parents not wanting to spend teh big cash when they can hand out a 99 dollar machine instead? I still thinks its dumb though. who knows maybe this is sony's way of getting more developement time after the 360 is out to further beat it
08-03-2005, 02:45 PM
#6
Go Giants
08-03-2005, 03:39 PM
#7
The sizzle in the Steak
This better not delay the release of Halo 3!!!!!!!
To be release the day PS3 comes out.
Perhaps they will up the release of Halo 3 being that PS3 will be delayed.
To be release the day PS3 comes out.
Perhaps they will up the release of Halo 3 being that PS3 will be delayed.
Trending Topics
08-03-2005, 04:19 PM
#8
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Thread Starter
Originally Posted by Moog-Type-S
This better not delay the release of Halo 3!!!!!!!
To be release the day PS3 comes out.
Perhaps they will up the release of Halo 3 being that PS3 will be delayed.
To be release the day PS3 comes out.
Perhaps they will up the release of Halo 3 being that PS3 will be delayed.
08-03-2005, 11:41 PM
#9
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Originally Posted by Moog-Type-S
This better not delay the release of Halo 3!!!!!!!
To be release the day PS3 comes out.
Perhaps they will up the release of Halo 3 being that PS3 will be delayed.
To be release the day PS3 comes out.
Perhaps they will up the release of Halo 3 being that PS3 will be delayed.
Sorry if I'm late, I just got tired of gaming for a while.
08-04-2005, 12:07 AM
#10
The sizzle in the Steak
Originally Posted by TL CHROMETIDE
Wait, Halo 3 is going to be for PS3?
Sorry if I'm late, I just got tired of gaming for a while.
Sorry if I'm late, I just got tired of gaming for a while.
It is scheduled to be released for Xbox 360 on the same day PS3 console is released.
08-09-2005, 12:21 PM
#12
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^^^ hahaha... good thinking. me too, lol.
08-09-2005, 05:00 PM
#13
Suzuka Master
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Originally Posted by srika
^^^ hahaha... good thinking. me too, lol.
08-09-2005, 05:48 PM
#14
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Thread Starter
no, lol
08-10-2005, 03:24 PM
#15
I think everyone is missing the big picture. They seemed to have thought this out pretty thoroughly... and there are only a few situations where they would even consider this strategy.
Think about it... XBOX will be released in late 2006 and will sell at a loss. Additionally, only a handful of games will be out, and it will be almost impossible to get since it will be out around the holidays.
Now, Sony waits a few extra months and sells PS2 units for $99 at a profit, where the XBOX is out at say $499. I'd bet that they will sell quite a bit of the PS2's at $99 especially around the holidays....and they'll make money on each sale. Then, come Jan or Feb of 2007 they can release their new system with a slew more games then they would have in say, Nov. 06 and come out with a bang. They'll also be able to monitor the 360's progress and adjust based on that. So if 360 is not selling well Sony can come in a tad lower and with more games (and better games since development time would be longer) and they'd be on top again in no time.
The danger here is losing too much market share to 360. The other danger is by holding off people will expect more games and better games, and if they don't deliver, they'll be in trouble. I don't think people really need to worry about the first issue though b/c each system has it's own fan base.... so the millions of Sony gamers would wait if they were rewarded with better and additional games.
Think about it... XBOX will be released in late 2006 and will sell at a loss. Additionally, only a handful of games will be out, and it will be almost impossible to get since it will be out around the holidays.
Now, Sony waits a few extra months and sells PS2 units for $99 at a profit, where the XBOX is out at say $499. I'd bet that they will sell quite a bit of the PS2's at $99 especially around the holidays....and they'll make money on each sale. Then, come Jan or Feb of 2007 they can release their new system with a slew more games then they would have in say, Nov. 06 and come out with a bang. They'll also be able to monitor the 360's progress and adjust based on that. So if 360 is not selling well Sony can come in a tad lower and with more games (and better games since development time would be longer) and they'd be on top again in no time.
The danger here is losing too much market share to 360. The other danger is by holding off people will expect more games and better games, and if they don't deliver, they'll be in trouble. I don't think people really need to worry about the first issue though b/c each system has it's own fan base.... so the millions of Sony gamers would wait if they were rewarded with better and additional games.
08-10-2005, 08:13 PM
#17
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Originally Posted by juniorbean
I think everyone is missing the big picture. They seemed to have thought this out pretty thoroughly... and there are only a few situations where they would even consider this strategy.
Think about it... XBOX will be released in late 2006 and will sell at a loss. Additionally, only a handful of games will be out, and it will be almost impossible to get since it will be out around the holidays.
Now, Sony waits a few extra months and sells PS2 units for $99 at a profit, where the XBOX is out at say $499. I'd bet that they will sell quite a bit of the PS2's at $99 especially around the holidays....and they'll make money on each sale. Then, come Jan or Feb of 2007 they can release their new system with a slew more games then they would have in say, Nov. 06 and come out with a bang. They'll also be able to monitor the 360's progress and adjust based on that. So if 360 is not selling well Sony can come in a tad lower and with more games (and better games since development time would be longer) and they'd be on top again in no time.
The danger here is losing too much market share to 360. The other danger is by holding off people will expect more games and better games, and if they don't deliver, they'll be in trouble. I don't think people really need to worry about the first issue though b/c each system has it's own fan base.... so the millions of Sony gamers would wait if they were rewarded with better and additional games.
Think about it... XBOX will be released in late 2006 and will sell at a loss. Additionally, only a handful of games will be out, and it will be almost impossible to get since it will be out around the holidays.
Now, Sony waits a few extra months and sells PS2 units for $99 at a profit, where the XBOX is out at say $499. I'd bet that they will sell quite a bit of the PS2's at $99 especially around the holidays....and they'll make money on each sale. Then, come Jan or Feb of 2007 they can release their new system with a slew more games then they would have in say, Nov. 06 and come out with a bang. They'll also be able to monitor the 360's progress and adjust based on that. So if 360 is not selling well Sony can come in a tad lower and with more games (and better games since development time would be longer) and they'd be on top again in no time.
The danger here is losing too much market share to 360. The other danger is by holding off people will expect more games and better games, and if they don't deliver, they'll be in trouble. I don't think people really need to worry about the first issue though b/c each system has it's own fan base.... so the millions of Sony gamers would wait if they were rewarded with better and additional games.
I don't see how Sony makes a $99 profit on a $149 system that is likely to be reduced in price to $99 for the holidays.
Lastly, the Xbox 360 is rumored to be launched at $299 which is far from the $499 price you have listed. By the time the PS3 comes out, the 360 will surely be cheaper than the PS3.
I've been following this entire thing closely, so I do know what I'm talking about throwing around the dates and price figures.
08-10-2005, 08:40 PM
#18
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Thread Starter
Originally Posted by cusdaddy
Lastly, the Xbox 360 is rumored to be launched at $299 which is far from the $499 price you have listed. By the time the PS3 comes out, the 360 will surely be cheaper than the PS3.
I've been following this entire thing closely, so I do know what I'm talking about throwing around the dates and price figures.
I've been following this entire thing closely, so I do know what I'm talking about throwing around the dates and price figures.
08-11-2005, 12:15 PM
#20
Originally Posted by cusdaddy
Xbox 360 is being launched this November 2005, not in 2006. It will also have 25 games during the launch window (between November and Christmas). Releasing the PS3 in 2007 versus late 2005 for the 360 will put it at a huge disadvantage. I doubt this rumor is true.
I don't see how Sony makes a $99 profit on a $149 system that is likely to be reduced in price to $99 for the holidays.
Lastly, the Xbox 360 is rumored to be launched at $299 which is far from the $499 price you have listed. By the time the PS3 comes out, the 360 will surely be cheaper than the PS3.
I've been following this entire thing closely, so I do know what I'm talking about throwing around the dates and price figures.
I don't see how Sony makes a $99 profit on a $149 system that is likely to be reduced in price to $99 for the holidays.
Lastly, the Xbox 360 is rumored to be launched at $299 which is far from the $499 price you have listed. By the time the PS3 comes out, the 360 will surely be cheaper than the PS3.
I've been following this entire thing closely, so I do know what I'm talking about throwing around the dates and price figures.
Never said Sony makes a $99 profit. Said they make a profit selling it at $99. If you read the article is says the PS2 can be produced for less then $99 which means they can sell it at a profit verses a next gen system that sells for a loss when it's first released.
Not sure on the pricing... I thought they were both supposed to be $499, but now that you mention it I do remember hearing Microsoft lowered the price to $299.
That said, I still don't think it's a bad idea. First gen titles usually aren't the greatest, and out of the 25 titles they're expecting out, I'd be surprised if 3 or 4 are must haves. The same thing happens with every system launch... promise a ton of games... and 90% of them are either average or suck. Then, the first year good games s-l-o-w-l-y start to roll out. If Sony waits, they can just make sure the good games come out with their launch. I do agree that they should not wait until 2007 (now that I realize the 360 is out in 2005, not 2006).. that's giving M$ way too much of a head start.... but delaying for months after the 360 isn't all bad. The 360 is going to be VERY tough to get this holiday season, so Sony should lower the price of the PS2 in November, and they'd sell a ton of them.
08-11-2005, 01:00 PM
#21
Safety Car
From srika's thread about teh xbox 360 launch list:
Looks like a pretty solid list...PGR3, FFXI, and Quake 4 hilighting the list for me
* Idea Factory: untitled
* Eidos: untitled
* Arc System Works: a 'battle melee action' game
* Activision: Call of Duty 2, Tony Hawk American Waste, Quake 4, Gun
* Atari Japan: Test Drive Unlimited
* Artdink: Take the A Train X
* SNK: KOF Max. Impact 2
* EA: FIFA, Need For Speed Most Wanted, NBA Live
* Capcom, Resi 5, Dead Rising
* Kids Station, untitled
* Cavia: untitled
* Glef: untitled
* Genki
* Koei: Shin Sangoku Musou Special
* Konami: Winning 11, Rumble Rose XX, Pro Yakyuu Spirits
* Success: Operation Darkness, ZOOKEEPER
* Jaleco: untitled
* Square Enix: FFXI
* Spike: untitled
* Sega: Chrome Hounds (?)
* Taito: World Air Force
* THQ Japan, Saints Row, The Outfit
* D3: X, Oneechanbara X
* Tecmo: DOA4, DOA XVB 2, Project Progressive (action game) DOA Code Cronus
* Tomy: Zoids
* Treasure: untitled game
* Namco: Ridge Racer 6, Frame City, untitled RPG, LOVE FOOTBALL
* Hudson: Tengai Makyou ZIRIA
* Hamster: untitled
* Bandai: Z Gundam
* Banpresto: Super Robot Taisen
* Vivendi: untitled
* From software: EM Enchant Arm
* Frontier Groove: untitled game
* Microsoft Game Studios: Everyparty (from Game Republic), Ninety Nine Nights, PGR3
* Marvelous: untitled game
* Yukes: Wrestle Kingdom
* Ubisoft: Ghost Recon 3
* Eidos: untitled
* Arc System Works: a 'battle melee action' game
* Activision: Call of Duty 2, Tony Hawk American Waste, Quake 4, Gun
* Atari Japan: Test Drive Unlimited
* Artdink: Take the A Train X
* SNK: KOF Max. Impact 2
* EA: FIFA, Need For Speed Most Wanted, NBA Live
* Capcom, Resi 5, Dead Rising
* Kids Station, untitled
* Cavia: untitled
* Glef: untitled
* Genki
* Koei: Shin Sangoku Musou Special
* Konami: Winning 11, Rumble Rose XX, Pro Yakyuu Spirits
* Success: Operation Darkness, ZOOKEEPER
* Jaleco: untitled
* Square Enix: FFXI
* Spike: untitled
* Sega: Chrome Hounds (?)
* Taito: World Air Force
* THQ Japan, Saints Row, The Outfit
* D3: X, Oneechanbara X
* Tecmo: DOA4, DOA XVB 2, Project Progressive (action game) DOA Code Cronus
* Tomy: Zoids
* Treasure: untitled game
* Namco: Ridge Racer 6, Frame City, untitled RPG, LOVE FOOTBALL
* Hudson: Tengai Makyou ZIRIA
* Hamster: untitled
* Bandai: Z Gundam
* Banpresto: Super Robot Taisen
* Vivendi: untitled
* From software: EM Enchant Arm
* Frontier Groove: untitled game
* Microsoft Game Studios: Everyparty (from Game Republic), Ninety Nine Nights, PGR3
* Marvelous: untitled game
* Yukes: Wrestle Kingdom
* Ubisoft: Ghost Recon 3
08-11-2005, 01:20 PM
#23
Originally Posted by bkknight369
From srika's thread about teh xbox 360 launch list:
Looks like a pretty solid list...PGR3, FFXI, and Quake 4 hilighting the list for me
Looks like a pretty solid list...PGR3, FFXI, and Quake 4 hilighting the list for me
08-11-2005, 09:07 PM
#24
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Originally Posted by juniorbean
LOL, not sure where I got 2006 from.... but I'm way off there... it's being released this holiday season.
Never said Sony makes a $99 profit. Said they make a profit selling it at $99. If you read the article is says the PS2 can be produced for less then $99 which means they can sell it at a profit verses a next gen system that sells for a loss when it's first released.
Not sure on the pricing... I thought they were both supposed to be $499, but now that you mention it I do remember hearing Microsoft lowered the price to $299.
That said, I still don't think it's a bad idea. First gen titles usually aren't the greatest, and out of the 25 titles they're expecting out, I'd be surprised if 3 or 4 are must haves. The same thing happens with every system launch... promise a ton of games... and 90% of them are either average or suck. Then, the first year good games s-l-o-w-l-y start to roll out. If Sony waits, they can just make sure the good games come out with their launch. I do agree that they should not wait until 2007 (now that I realize the 360 is out in 2005, not 2006).. that's giving M$ way too much of a head start.... but delaying for months after the 360 isn't all bad. The 360 is going to be VERY tough to get this holiday season, so Sony should lower the price of the PS2 in November, and they'd sell a ton of them.
Never said Sony makes a $99 profit. Said they make a profit selling it at $99. If you read the article is says the PS2 can be produced for less then $99 which means they can sell it at a profit verses a next gen system that sells for a loss when it's first released.
Not sure on the pricing... I thought they were both supposed to be $499, but now that you mention it I do remember hearing Microsoft lowered the price to $299.
That said, I still don't think it's a bad idea. First gen titles usually aren't the greatest, and out of the 25 titles they're expecting out, I'd be surprised if 3 or 4 are must haves. The same thing happens with every system launch... promise a ton of games... and 90% of them are either average or suck. Then, the first year good games s-l-o-w-l-y start to roll out. If Sony waits, they can just make sure the good games come out with their launch. I do agree that they should not wait until 2007 (now that I realize the 360 is out in 2005, not 2006).. that's giving M$ way too much of a head start.... but delaying for months after the 360 isn't all bad. The 360 is going to be VERY tough to get this holiday season, so Sony should lower the price of the PS2 in November, and they'd sell a ton of them.
The 360 has a pretty solid launch lineup compared to past consoles, but I do agree that the first gen games aren't usually huge system sellers. The issue is that Sony will be releasing the PS3 and it's first gen games when the 360 will be solidly in it's second gen with signicantly more quality games. Should be interesting, but I'd wager on the PS3 launching holiday 2006 in the US at the latest.
08-11-2005, 09:25 PM
#25
Senior Moderator
Thread Starter
things change so fast in this industry..... this is all really just some good ole' fashioned speculation.. oh well, something to talk about
08-12-2005, 09:04 AM
#26
'Big Daddy Diggler'
Sony will most def. price cut the PS2 to 99 when the 360 comes out. If they start selling more PS2's and the sales are strong, they might delay it to make more money off PS2 sales. It might hurt them also. More people buying PS2's will mean less people to initially buy a PS3.
Last edited by bigman; 08-12-2005 at 09:08 AM.
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